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The Rise and Fall of Nokia

By Julian Birkinshaw, Lisa Duke


The case describes Nokia’s spectacular rise and fall, shedding light on the combination of external factors and internal decisions that resulted in the company’s handset business being sold to Microsoft in 2010.During the successful period of growth (roughly 1990 through to 2006), Nokia’s focus on design and functionality gained it a worldwide reputation. It was acknowledged as the first smartphone manufacturer. Through the early-mid 2000s it was the undisputed leader in the global mobile phone business. The case traces the first signs of trouble and the company’s subsequent decline over the period 2005 to 2010. Pressure in the early 2000s from low-end competitors led to early signs of problems. Then of course the game changed in 2007 with Apple’s iPhone and a year later with phones powered by Google’s Android operating system from HTC, Samsung and others. Nokia was initially dismissive of these new offerings but its proprietary OS, Symbian, was ageing badly and its App store (Ovi) was no match for Apple’s. In September 2010 it was announced that American Stephen Elop, formerly of Microsoft, would become CEO. Not long afterwards a partnership with Microsoft was signed which subsequently led to Nokia’s handset business being sold to Microsoft.

Learning objectives

  1. Understand why good companies go bad; in other words, see how the assets that enable companies to succeed can also be liabilities when the market turns against them.
  2. Provide insight into the nature of disruption in an established industry and why incumbent firms struggle to adapt.
  3. Examine the different paths companies should take to respond to disruptive forces.
  4. Understand the leadership challenge for executives when their performance starts to decline2. To understand the dynamics of change in a fast-changing industry.
  5. Identify strategies companies can use to adapt quickly to disruptive changes.


Publication Date: September 2011
LBS Case Code: CS-11-031
Subjects: , ,
Pages: 20
Format: pdf